New Delhi The power ministry has written to the Cabinet Committee on Infrastructure to mandate a uniform 50% risk weight to bank loans for state-owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), a move which could lead to banks doubling their exposure to these companies if it finds favour with the Reserve Bank of India (RBI).
The power ministry has proposed a uniform risk weight of 50% for these two infrastructure financing companies (IFCs). At present, banks assign low risk weight only to top-rated IFCs, while others attract 100% risk weight.